Hyperliquid’s HYPE token has delivered eye-popping returns in 2026, but the rally is entering a zone where history suggests caution. Ali Martinez sees a dangerous technical setup converging at current levels.
What to know
- HYPE token surged 55% in the past week and is up 130% year-to-date.
- Analyst Ali Martinez (@alicharts) warned on X that the asset is approaching a critical resistance zone.
- Multiple sell signals are aligning simultaneously: the TD Sequential Combo 13 is already active, a green 9 sell signal could confirm next session.
- Both the Relative Strength Index (RSI) and the Chande Momentum Oscillator are at historically elevated levels, indicating overbought conditions.
- Martinez flagged a potential retracement toward $40 if momentum falters at current prices.
- The warning comes amid broader market movements, including a spike in new XRP wallets.
The Rally So Far
Hyperliquid’s HYPE token has been one of the standout performers in the crypto market this year. A 55% gain in a single week has captured traders’ attention, pushing year-to-date returns past 130%. Such velocity often breeds euphoria, but it also attracts the scrutiny of technical analysts who look for signs of exhaustion.
The rally has been driven by a combination of network activity, liquidity inflows, and speculative appetite. However, as prices climb, the risk of a sharp correction increases—especially when multiple timing indicators flash red at the same time.
Technical Signals Converge
According to Ali Martinez, a well-followed crypto analyst, the current price zone on HYPE is now marked by a rare confluence of sell signals.
First, the TD Sequential Combo 13 sell signal is already active. The TD Sequential is a time-based indicator that identifies points of trend exhaustion. A Combo 13 signal is considered one of the most reliable reversal alerts. Second, a standard green 9 sell signal could confirm as early as the next trading session, adding another layer of bearish timing.
Beyond these time-based signals, momentum oscillators are in extreme territory. The Relative Strength Index (RSI) —a classic measure of overbought or oversold conditions—is sitting at historically elevated levels. Readings above 70 generally indicate overbought conditions, while a move above 80 often signals parabolic exhaustion. The Chande Momentum Oscillator tells a similar story: it too is at levels that have preceded corrections in the past.
The Analyst’s Warning
Martinez laid out the technical case with precision on X. He warned that the simultaneous activation of these signals creates a “dangerous setup” around the current resistance zone. If momentum fails to push through, a retracement toward $40 is a plausible path.
A drop to $40 would represent a significant correction from current levels, given the weekly surge. However, Martinez did not indicate a specific timeline for the potential move—only that the risk is acute if buying pressure wanes.
What a Pullback to $40 Would Mean
A retracement of this magnitude would test both short-term holders who bought near the top and the broader market’s confidence in HYPE’s trend. It could also create a buying opportunity for those waiting for a better entry point.
The $40 level is not just a psychological round number; it also coincides with previous areas of support and resistance. Whether the token can stabilize there will depend on overall market sentiment and whether new catalysts emerge to reignite demand.
Market Context: XRP Wallet Growth
Separately, the crypto market saw notable activity in XRP, which registered the fourth-largest wallet creation spike of 2026. Santiment reported over 4,300 new wallets in a single 24-hour period. While not directly tied to HYPE, this surge in network engagement suggests a broader uptick in retail interest across the ecosystem. It also underscores the current appetite for digital assets despite the technical warnings on individual tokens.
Looking Ahead
The next few trading sessions will be crucial for HYPE. If the green 9 sell signal confirms and the RSI remains elevated, the probability of a pullback increases. Traders will be watching volume closely—declining volume on further upside would be a classic divergence warning.
For now, the rally is intact, but the technical evidence is stacking up against a continued move higher. Ali Martinez’s warning serves as a reminder that even in the hottest markets, indicators of exhaustion deserve attention. Whether HYPE can defy the signals or must correct toward $40 may determine the next leg of its 2026 story.
